The buying and selling of CDOs: Whose fault is it?

Got this from BaselineScenario (post entitled How To Sell Toxic Waste), and was originally taken from ZeroHedge blog. I thought it was interesting. The post basically showed another victim of allegedly safe investments, the Kenosha Unified School District, which invested as much as $200 million of funds to Stifel Nicolaus, which was once selling “riskless” synthetic CDOs. Now the firm is facing a lawsuit from the school district. What I liked more about the post (perhaps unnecessarily so) were statements given by people from Stifel Nicolaus about the investment:

“These are safe AA/AAA type investments.”

“It’s a AA rated investment [and . . .] meets statute prior to new rules that allow you to invest in anything, so we’re staying on the conservative side.”

“It takes 20 out of these 100 companies to default before it gets to your AA level.”

“There would need to be 15 Enrons before you would be impacted.”

Below is the presentation given by Stifel to the victim (again thanks to ZeroHedge):